Business Loan EMI Calculator

Business Loan EMI Calculator

Today SMEs are the backbone of Indian economy and they are growing at a rapid pace which
has made demand for business loans go up. Along with public-sector banks, many private
financial institutions and NBFCs are offering business loans to existing and upcoming
small businesses for various needs like working capital management, business
maximization, running business operations, etc. EMI on business loans can be
measured using a business loan EMI calculator by simply putting in the loan amount,
loan
tenure and interest rate on the loan. Business Loan EMI calculator calculates equal
monthly payments a business needs to pay upon taking a loan.

What Is A Business Loan EMI Calculator?

When you decide to take a business loan, you might have some loan amount and loan duration in your mind. You might also be thinking that what the EMI will be. In this case, the loan EMI calculator will help you. A business loan EMI calculator has three key variables: loan tenure, loan amount, and interest rate.

If you borrow a business loan of worth Rs. 1,00,000 for the duration of 2 years at the interest rate of 14 per cent then you can enter these values in EMI calculator. The EMI amount will come out to be INR 4,992 with interest of INR 19,819. The overall amount will be INR 1,19,819.

How Does A Business Loan EMI Calculator Work?

Those who are businessmen be it small, medium or large, sometimes they feel the requirement of cash inflow to run their manufacturing unit. So they borrow the money from NBFCs or banks at an equitable interest rate. The amount of loan that is spent on business and business-related activities is known as a business loan.

Business loan EMI, popularly also known as Equated Monthly Installment denotes monthly payments to your loan issuer. The EMI contains two parts: accumulated interest and borrowed principal amount. The accumulated interest is evaluated on the rate of interest that is agreed at the time of loan disbursal.

The Functioning Of Online Business Loan EMI Calculator

An online business loan EMI calculator uses an easy formula.

E = P x r x (1+r) n / (1+r) n-1,

E = EMI amount

r = rate of interest at which the loan is borrowed,

P = Principal amount

n is the duration of the loan in which you will repay the loan.

It is burdensome to calculate monthly EMI manually by using the above formula; hence businesses have created this small business loan EMI calculator. This is an online tool that will do the calculations for you.

Why Do You Require A Business Loan EMI Calculator?​

It saves you from the tiresome calculations. Gone are those days when you used to calculate your monthly payments on a paper. Now, you can enter some details and click enter. All work is done by loan EMI calculator.

Beneficial for financial planning- Business is a risky affair. Financial decisions are hard to make as they involve a large amount of money. Also, the effects of non-payment of business loans are the same as of the individual loan. If you are aware that how much EMI and interest amount you are paying monthly then it will be easier to plan your finances and to make other financial decisions.

Visualization advantages- The business loan EMI calculators show your payments in a visual format by using diagrams and pie charts. It is proven that visual depictions are easier to understand as compared to normal written text.

What Impacts Loan EMI And How To Reduce Your EMI?​

So, till now you must have calculated the estimated EMI amount but maybe it is high for you and you want to reduce EMI amount. Hence, it is important to know how to decrease EMIs what impacts your EMI. The key factors that affect monthly EMI are discussed below:

Loan Tenure:One of the key factors that affect the EMI amount is loan tenure. Loan tenure is the time period over which you will repay the entire loan amount. Longer loan tenure means that repayment amount is strained to many years and hence it is lower. But the interest also increases with the duration of time. It needs a great thought as the principal amount to be paid monthly is decreased over a long duration and accumulated interest also increases. Hence, you must try all possible combinations of the rate of interest and loan tenure by using the business loan EMI calculator and select the best one.

Rate of interest:Rate of interest is important for the EMI amount. Rate of interest is a competitive factor for a financial institution as a low-interest rate attracts more customers to the bank to get a loan. It is therefore essential to explore interest rates from all institutions. After research, you can select one that is best for the loan amount. The higher the rate of interest, higher is your EMI and less is the rate of interest lesser will be the EMI amount

Loan Amount:Loan amount is a key factor of EMI calculations. As the principal loan amount is the basis for EMI calculations, it makes sense to tweak loan amount a little. The higher the loan amount, the higher is the EMI and less is the loan amount, lesser is the EMI. You have distinct needs that involve a large sum of money that is why loan amount is you would not want to move at.

Business is a risky affair and requires cash inflow per month. You must be prepared for future expenses. If you know how much money is required every month then you can apply for the loan and take the financial decision more aptly. Hence, this is where the advantages of using the loan EMI calculator comes up. We have mentioned the entire guide of how a business loan EMI calculator work and will be able to help in getting the right business loan.

Frequently Asked Questions

Why should you calculate the EMI before borrowing a business loan?

Taking a financial decision regarding a business loan is quite crucial, especially when it’s
a big amount impacting your growth. It’s always good to take an informed decision with
respect to the monthly cash outflow or the EMI payment a business will have to make on
the business loan it opts for. EMI will vary depending on the loan amount, loan tenure
and interest rate.

Can the EMI amount and interest be reduced?

Interest rate is ascertained basis your credit history. However, EMI on your business
loan depends on the loan tenure you opt for. By maximizing the loan’s duration, the EMI
amount can be reduced. Or you can make a part payment depending on your cash flows
to reduce the EMIs. You can use the business loan EMI calculator to get the EMI
amount as per your business needs. You should also check for reducing balance EMI
calculator as a lot of offers work on reducing balance which reduces the interest
payment.

What if somebody misses his/her EMI amount?

If somebody misses the EMI amount, it will be charged with the next EMI which will
become double of the present EMI. Moreover, a late fine will be charged, based on the
T&C marked by the lender. Take an informed decision with an EMI loan calculator to
avoid any EMI repayment delays.

Does the emi change in the future?

Generally, the EMI doesn’t change; nevertheless, it can increase as per the government’s decision on increasing the interest rate.

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Most small businesses struggle to get a timely loan to grow. At Indifi, we are committed to changing it. We are a technology platform creating easy loan origination, and leverage our segment understanding to create risk models. This brings multiple partners and lenders to fill the credit gap, helping small businesses access unsecured business loans, through a quick and simple process. We have tailored loans for Travel, Hotel, e-Commerce, Restaurant, Trading and Retail businesses.